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Transact to offer post A-Day bond

Online wrap service, Transact, is to offer an onshore bond after A-Day but is likely to opt for the traditional mirror fund method rather than adopting plans for calculating investors' tax liabilities on each asset.

Assets within investment bonds technically belong to the insurance company itself. It therefore faces a corporate tax liability on gains made and needs a method of passing this onto investors.

Typically groups such as Skandia and Selestia open mirror funds that are priced to take account of the tax liability. Transact is considering this as an option but has also tried to work out a way of conveying the true reflection of a client's position in any particular asset on any one day.

Malcolm Murray, the fund platform's head of sales and marketing, said: "We have said we will definitely offer an onshore bond. But it has to take second place to getting ready for A-Day and will not be going ahead before that date.

"We are looking at just how complex the second option is and whether it is feasible. But we know advisers would like to see the product sooner rather than later and if it means mirror funds, they are perfectly happy to live with that."

Part of the product's appeal will be in its simple charging structure, with no variations on allocation rates.